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First Commonwealth Bank and Sageworks partner to provide automated and enhanced allowance for loan and lease losses methodology

By Community Bank Insight staff, March 16, 2017 

Today, Sageworks, a financial information company that provides lending, credit risk and portfolio risk solutions to banks and credit unions, announced its partnership with First Commonwealth Bank, headquartered in Indiana, PA, to enhance its allowance for loan and lease losses (ALLL) calculation process and methodology.

First Commonwealth chose to partner with Sageworks and leverage Sageworks ALLL to save time with the calculation and bolster its analytic capabilities. Without the software, the bank was spending a significant amount of time building and administering its allowance models and internal control environment. In addition to increased efficiency, Sageworks ALLL automates documentation and workflow management, which streamlines the calculation each quarter and increases process integrity.

First Commonwealth examined several providers before choosing Sageworks. “We were impressed with Sageworks, not only with the product but with their potential to partner with us in developing additional best practices. We also considered the upcoming CECL environment and wanted a partner like Sageworks that we felt comfortable with,” said Tony Kallsen, Senior Credit Officer at First Commonwealth. “Sageworks ALLL will provide a framework for data content that we are simply not capable of using Excel.”

The bank also expects Sageworks to simplify and strengthen the auditing of the calculation as well. “To be specific, because Excel is an open architecture, we have redundant controls, and from an audit perspective, every formula needs to be checked and rechecked to guard against unintended changes. This [Sageworks] platform will be locked down and will alleviate the need for some of these checks,” said Kallsen.

“We are excited to partner with First Commonwealth for the ALLL,” said Sageworks CEO Scott Ogle. “We make CECL-prep for our clients a priority, which is why we built expected loss rate methodologies into the software early, well in advance of deadlines. With the time-savings First Commonwealth will achieve, they can reinvest that time in scenario building and planning so they are well equipped for CECL compliance.”

Through the use of Sageworks’ scenario building, First Commonwealth can quickly make changes to its model, assess impact and backtest accuracy. “Sageworks can not only help us identify best practices but can also help us champion those changes through the process, which includes helping us support our positions with our external auditors,” said Kallsen.

For the full story featuring Sageworks, visit Community Bank Insight - First Commonwealth Bank and Sageworks partner to provide automated and enhanced allowance for loan and lease losses methodology.